INFOGRAPHIC: Top 9 Software Outsourcing Mistakes
Last updated: November 10, 2022 Read in fullscreen view
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Here is a list of things you should avoid so that the business objectives you pursue are not put at risk when you outsource software services.
Software outsourcing is an increasingly popular process within companies of different industries and is regarded as a strategy highly linked to achieving greater competitiveness and productivity.
Outsourcing IT or software implies the search for an external source to provide services such as development, consulting, quality assurance, infrastructure, etc. When a company chooses this strategy, it may be due to several reasons, ranging from the capacity of the workforce or the lack of technological and methodological knowledge to a corporate decision of focusing efforts on the core business.
Whatever the case may be, software outsourcing is a process that must be well analyzed before its implementation, as it can have negative effects if the right decisions are not made. Thinking about this, I wanted to make a ranking of the 9 aspects that must be avoided so that the business objectives you aim to achieve are not put at risk when contracting this service.
1. NOT CORRECTLY DEFINING THE PROJECT OR THE TASKS TO OUTSOURCE
Making the decision to outsource software must arise because clear strategic objectives are being pursued and not merely because of capacity issues. It is necessary to make an exhaustive analysis of the possible projects or tasks to contract in order to determine if they are, in fact, the projects or tasks that must be outsourced.
It is natural that companies prefer to outsource the simplest tasks or smaller projects, which can lead to not taking advantage of the benefits offered by an external provider of these types of services.
2. NOT SELECTING THE RIGHT PROVIDER
One of the challenges of outsourcing software is the selection of the provider, which can be a difficult and risky decision, with costly consequences if it is not carried out correctly. The comparison between different suppliers must be objective, judicious, and supported by a lot of information.
The different criteria to be taken into account during the evaluation of the candidate companies must be identified, such as geographical location, language, experience in technology, knowledge of the industry, and the growth capacity of the team, just to name a few.
Once each of these criteria has been evaluated and a pre-selection of the companies has been made, you will be able to have an objective value for each of the alternatives in order to choose the best one. Analyze, compare, and make a smart decision!
3. KEEPING JUST THE COST IN MIND
One of the biggest and most common mistakes when choosing a technological partner is letting much of the decision depend solely on the price. In software outsourcing, other factors have to be taken into consideration, as I mentioned in the previous point.
Even though the price is very important, when it comes to software outsourcing, you will have to look beyond it. Many times, the cheapest supplier is chosen, but in the short or medium term, it may be necessary to make a larger investment than initially planned.
4. NOT GETTING INVOLVED IN THE MANAGEMENT
It is key that in the day-to-day running of the outsourced project there is a professional involved, who is usually the Product Owner when using Scrum.
If the project does not have a person who is involved in the different moments of the project, who has full knowledge of the business and the scope of the project, who does not lead or manage the risks, changes, and budgets, it will be very difficult for the outsourcing model to be a success.
5. BASING ONLY ON RESULTS
Typically, the success of outsourcing is evaluated based on the mere fulfillment of the objectives. This is not entirely wrong, as long as in order to define these objectives, we consider some aspects related to learning to work together between the client and the provider, such as the strengthening of the relationship, methodological and technical learning, new business opportunities, etc.
In general, these benefits are not taken into account in the long term when defining the goals, given their difficult sizing and measurement. It is key that these advantages are also considered when building the objectives.
6. NOT TAKING ADVANTAGE OF THE LEARNING OPPORTUNITIES OF THE SUPPLIER
Every client-supplier working relationship comes with a host of learning opportunities that, if taken advantage of, add a highly beneficial value for both parties. Learning from the methodology used by the supplier, from the processes, acquiring new technical knowledge, and capitalizing it in trainings for the client’s technical team are some examples of learning opportunities that should not be missed.
7. GETTING CARRIED AWAY BY THE HONEYMOON EFFECT
In every beginning of a working relationship, there is usually a period of time in which everything works well, and only good things happen; however, that phase (frequently called honeymoon) eventually ends and the normal period of work begins, where good and bad things happen (change of plans, unexpected requirements, bad decisions, etc.).
It is almost inevitable that this will happen, but the important thing is to be clear that the management and involvement in the project by both actors must happen from the beginning of the project and continue it with the same intensity and enthusiasm throughout the entire duration of the working relationship.
8. NEGLECTING THE CONTRACTUAL ASPECTS
For both the client and the supplier, it is essential to define the type of contract on which the project will be based, which includes all the business objectives, milestones, and dedication expected, among other aspects.
There are also other contractual aspects that have the same importance as the ones mentioned above. Since it is possible to work with providers abroad and therefore, to deal with different regulations and legislation, the working arrangements must be clear and properly prepared, also stipulating how to proceed in a case of non-compliance, following the corresponding legislation.
9. NEGLECTING THE TECHNICAL QUALITY
It is important for the client to ensure that the products obtained by the outsourcing service comply with the same quality assurance processes that would apply if they were products developed by themselves.
It is essential that in the case the company does not have the technical capacity to implement quality assurance procedures, it should require the supplier to provide a minimum expected (and realistic) quality level for its deliverables.
TO SUM UP
More and more companies are opting for software outsourcing as part of their business strategy. For the success of projects under this model, it is extremely important to understand that there must be involvement in the management from the beginning and constant training of the teams involved (both the client’s and the provider’s) in order to achieve a working maturity that guarantees the strengthening of the relationship between both parties and the fulfillment of the established objectives.
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